A 56 percent of entrepreneurial ventures are out of B 56 percent of entrepreneurial ventures are still in C 31 percent of entrepreneurial ventures are out of D two-thirds of entrepreneur
Trang 1Fundamentals of Management, 7e (Robbins/DeCenzo/Coulter)
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2) An entrepreneurial venture is the same as a small business
Answer: FALSE
Explanation: An entrepreneurial venture and a small business can look similar from the outside However an entrepreneurial venture focuses much more on being innovative, seeking
opportunities, and growth than a small business
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3) An entrepreneurial venture is much more likely to change an industry than a small business Answer: TRUE
Explanation: Being much more innovative than a small business, an entrepreneurial venture looks to invent new products and methods of production that change an entire industry An example is the Viking Range, which helped create an entire new type of super-premium kitchen appliance
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4) Most entrepreneurial ventures are successful
Answer: FALSE
Explanation: Data shows that only 44 percent of ventures survive four years of business After seven years, only 31 percent of ventures remain
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5) One of the first things an entrepreneur does is look for potential opportunities in the
marketplace
Answer: TRUE
Explanation: Identifying opportunity is the first thing any entrepreneur does Without finding an opportunity there is no reason to start an organization
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6) Legal issues for an entrepreneurial organization are typically addressed after the organization
is up and running
Answer: FALSE
Explanation: Legal issues that involve taxes, liability, and such things as patents need to be taken care of before the organization is up and running How the organization is set up and structured in a large part will determine how the legal issues are addressed
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Trang 27) Once the entrepreneurial organization is up and running, the entrepreneur becomes a manager.Answer: TRUE
Explanation: After all planning and launching activities are over, the entrepreneur must assume the role of manager and start helping to produce the goods or services she plans to provide.Diff: 2 Page Ref: 112
8) An executive summary is the most complete kind of business plan
Answer: FALSE
Explanation: An executive summary is the most brief form of a business plan, typically running
no longer than two pages in length
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9) A context analysis sizes up the target market and evaluates possible competitors to the
company
Answer: FALSE
Explanation: An opportunity analysis sizes up the target market and evaluates possible
competitors to the company, not a context analysis A context analysis gives a broad view of the trends in the entire industry and its place in the economy
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10) An entrepreneurial venture's advertising strategy would be included in the description of the business section of a full business plan
Answer: TRUE
Explanation: The description of the business would include, among many other things, the advertising strategy that the organization plans to employ when it is operational
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11) Since it is impossible to predict the future, projected income estimates are not part of a good business plan
Answer: FALSE
Explanation: Though often difficult to make, income forecasts are in fact an important part of a business plan Even if the estimates turn out to be wrong they still give planners a baseline to which they can make comparisons
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12) The two primary factors that affect the legal structure of an entrepreneurial organization are taxes and legal liability
Answer: TRUE
Explanation: The way the organization is structured has a critical effect on how it will be taxed and what liability it will have Organizations with a lot of assets, and therefore a lot to lose, for example, must be structured differently than those with little to lose
Diff: 2 Page Ref: 114
13) If the legal structure of an entrepreneurial venture does not turn out to be ideal, it can always
be changed easily once the organization is up and running
Answer: FALSE
Explanation: Changing the legal structure of the organization is difficult and time-consuming, so
Trang 314) When they first start out, most small entrepreneurial ventures have a very informal
organizational structure
Answer: TRUE
Explanation: In many cases, there is no real structure other than the entrepreneur making all decisions and delegating work only as he or she sees fit
Diff: 2 Page Ref: 115
15) An entrepreneurial venture that sees its competitive advantage in cost efficiency would tend
to adopt an organic style organizational structure
Answer: FALSE
Explanation: A venture that focused on costs and efficiency would tend to need a more
mechanistic, rather than an organic approach
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16) Since they are often overwhelmed by the pressure of decisions, one chore that most
entrepreneurs never hesitate to delegate is decision making
Answer: FALSE
Explanation: In fact, most entrepreneurs have great difficulty letting go and allowing someone else to make decisions Letting others make decisions causes the entrepreneur to lose some control over the organization so the aversion to sharing decision-making power is not unfounded.Diff: 2 Page Ref: 115
17) When hiring, entrepreneurs are typically much less concerned with matching a candidate's values to the organization's organizational culture than traditional HRM managers
Answer: FALSE
Explanation: The opposite is true Entrepreneurs are much more concerned about getting a good match between a candidate and the organizational culture than traditional HRM managers Diff: 2 Page Ref: 115
18) The classic "entrepreneurial personality" is a person who is high in self-confidence,
motivation, and energy
Answer: TRUE
Explanation: Other well-known traits of entrepreneurs include risk-taking, resourcefulness, persistence, and autonomy
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19) People with proactive personalities tend to react to their environment more than trying to change their environment
Answer: FALSE
Explanation: The reverse is true Proactive people tend to take action rather than waiting to react
to what happens to them
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20) You would expect an entrepreneur who has a grand vision for the future to be more of a taker than an entrepreneur who is using his or her venture simply as a source of income
risk-Answer: TRUE
Trang 421) The more proactive you are, the more likely you are to be an entrepreneur.
Answer: TRUE
Explanation: People who rate high on proactivity tests are more likely to be entrepreneurs Proactivity is largely a measure of how strongly a person feels about taking action to solve problems
Diff: 2 Page Ref: 117
22) Identifying opportunity is not a trait of a person with a proactive personality
Answer: FALSE
Explanation: In proactivity tests such as the one on page 117, the ability to identify opportunity
is listed as a characteristic of a proactive person
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23) Employee empowerment increases productivity but decreases employee motivation
Answer: FALSE
Explanation: Empowerment increases both productivity and motivation In fact, productivity typically rises because motivation has risen
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24) A good way to ease into employee empowerment is to let employees share in decision making
Answer: TRUE
Explanation: Participative decision making allows both bosses and employees to get used to the idea of employees making decisions After trust has been established, the employees can then be empowered to make decisions on their own
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25) Employee empowerment has little effect on an organization's profits or productivity
Answer: FALSE
Explanation: Empowerment, when properly done, has been shown to result in gains in
productivity, profits, quality, and employee satisfaction
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26) The leader of an entrepreneurial organization is like a jazz band leader because she controls every note that her "musicians" play
Diff: 2 Page Ref: 118
27) Nonvisionary entrepreneurial leaders usually outperform visionary entrepreneurial leaders.Answer: FALSE
Explanation: The opposite is true A study shows that visionary companies outperformed
nonvisionary companies by a wide margin in both standard financial measurements and stock market performance
Trang 528) A command-and-control leadership style works best with an entrepreneurial organization that is organized in teams.
Answer: FALSE
Explanation: Teams respond much better to a coach-and-collaboration leadership style than a command-and-control leadership style
Diff: 2 Page Ref: 119
29) One of the keys that distinguishes an entrepreneurial organization from a conventional organization is the concerted emphasis on growth
Answer: TRUE
Explanation: Focus on growth is a distinguishing characteristic for an entrepreneurial venture If
an organization doesn't vigorously pursue growth, it isn't truly entrepreneurial
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30) The first step in managing a downturn in an entrepreneurial business is to recognize that things are not going well
Answer: TRUE
Explanation: Many entrepreneurs will willfully ignore signs of trouble, preferring to redouble their efforts in a positive direction rather than try to remedy problems that are occurring So the most important step in managing a downturn is recognizing the downturn in the first place.Diff: 2 Page Ref: 119
31) Selling an entrepreneurial venture is always a sign of failure
Answer: FALSE
Explanation: Exiting a venture and harvesting the profits of the sale can be very lucrative, and not at all a sign of failure
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32) Because entrepreneurship is so time-consuming and energy-consuming, many entrepreneurs have trouble in their personal lives
Answer: TRUE
Explanation: Running an entrepreneurial venture is often a never-ending enterprise, leaving entrepreneurs with little or no time for family or friends For this reason, entrepreneurs need to become expert time managers, always being able to find the time for true priorities
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33) Saving money by avoiding the expense of professional legal and accounting advice is often amistake for entrepreneurs
Answer: TRUE
Explanation: Entrepreneurs should avoid being penny-wise and pound foolish When they need help, they should spend the money for professional service Good professional advice is often critical to the survival of an entrepreneurial venture
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Trang 634) It is a good idea for an entrepreneur to develop a network of trusted friends and advisors to help with problems and decisions.
Answer: TRUE
Explanation: What many entrepreneurs find especially helpful are peers who can say "no" to them Inside the organization an entrepreneur often has no one with the power to second-guess his or her judgment A disinterested peer can be critical without risking his or her job
Diff: 2 Page Ref: 120
35) An entrepreneurial venture and a small business
A) are superficially similar
B) are identical
C) have nothing in common
D) are impossible to tell apart
Answer: A
Explanation: A) Entrepreneurial ventures and small businesses are clearly not identical, ruling out "identical and impossible to tell apart" as correct responses, but they do have a number of characteristics in common, ruling out "having nothing in common" as a correct response The two are similar on the surface in that they are both small in size (at least initially) and often informally run, making "being superficially similar" the correct response for this question An entrepreneurial venture focuses much more on being innovative, seeking opportunities, and growth than a small business
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36) One key difference between an entrepreneurial venture and a small business is that the entrepreneurial venture focuses on
Diff: 2 Page Ref: 111
Trang 737) When it was first starting out, the Viking Range company qualified as an entrepreneurial organization because its products were .
A) high in quality
B) expensive
C) innovative and different
D) loved by serious cooks
Answer: C
Explanation: C) The thing that distinguishes an entrepreneurial venture from other ventures is that the entrepreneurial venture is innovative in some way Producing products that were costly, high in quality, or beloved did not make Viking an entrepreneurial company Making innovative products did qualify Viking as entrepreneurial, so innovative is the correct response for this question
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38) Besides being innovative in some way, a second defining characteristic of an entrepreneurial venture is that it is
an incorrect response Focus on growth is a defining characteristic of an entrepreneurial venture,
so focused on growth is the correct response for this question
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39) An "accidental entrepreneur" is someone who became an entrepreneur because she
A) always had a dream to start a company
B) lost her job
C) identified a great opportunity
D) quit her job
Answer: B
Explanation: B) Though accidental entrepreneurs may have always had a dream to start a
company and may be good at identifying opportunities, those are not primary reasons why they became entrepreneurs Instead, they became entrepreneurs because they had lost, rather than quit their jobs, typically in a corporation This makes losing one's job the correct response for this question
Diff: 2 Page Ref: 111
Trang 840) In the wake of the recent economic downturn, statistics show that entrepreneurship is
Explanation: B) The lack of jobs in today's economy is probably the cause of the recent increase
in entrepreneurship, but this increase is modest rather than dramatic, making modestly rising the correct response and ruling out dramatically rising Note that this modest increase also rules out the other two choices as correct responses because both include "falling" in their answer
Diff: 2 Page Ref: 111
41) After four years, business
A) 56 percent of entrepreneurial ventures are out of
B) 56 percent of entrepreneurial ventures are still in
C) 31 percent of entrepreneurial ventures are out of
D) two-thirds of entrepreneurial ventures are out of
Answer: A
Explanation: A) After four years, only 44 percent of entrepreneurial ventures remain in business,making "56 percent are out" the correct response for this question and ruling out "56 percent are still in." After two years, two-thirds of the ventures are still in business, not out of business Afterseven years, 31 percent of the ventures are still in business, not out of business
Diff: 2 Page Ref: 111
42) Survival rates of entrepreneurial ventures that started in a recession are those that started in an expansion
A) somewhat greater than
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Trang 943) In most cases, the first step in the initial pre-planning phase of the entrepreneurial process is this.
A) pinpointing potential competitive advantages
B) identifying potential opportunities
C) exploring finance options
D) researching the venture's feasibility
Answer: B
Explanation: B) Without a promising opportunity there is no reason to embark on a venture in the first place So the first step in the pre-planning phase of the entrepreneurial process is to identify a promising potential opportunity in the marketplace, making identifying opportunities the correct response for this question The second step is to pinpoint competitive advantages that your approach to developing the opportunity might offer If you seem to have a real competitive edge, the third step is to see how feasible the venture is by estimating costs and assessing
competitors The final step of the process, if other things check out, is to explore options for funding
Diff: 2 Page Ref: 112
44) This is typically the second step in the initial pre-planning phase of the entrepreneurial process
A) researching the venture's feasibility
B) identifying potential opportunities
C) exploring finance options
D) pinpointing potential competitive advantages
Answer: D
Explanation: D) After a promising potential opportunity in the marketplace has been identified
as step one of the process, the second step is to pinpoint competitive advantages that you might have in developing this opportunity, making pinpointing advantages the correct response for this question If you seem to have a genuine competitive edge, the third step is to see how feasible theventure is by estimating costs and assessing competitors The final step of the process, if other things check out, is to explore options for funding
Diff: 2 Page Ref: 112
45) The third step in the initial pre-planning phase of the entrepreneurial process is .A) exploring finance options
B) pinpointing potential competitive advantages
C) researching the venture's feasibility
D) identifying potential opportunities
Answer: C
Explanation: C) After identifying both a promising potential opportunity in the marketplace and competitive advantages you might have in developing this opportunity, the third step in the pre-planning phase of the entrepreneurial process involves gauging the feasibility of the project Thismay involve estimating costs, assessing competitors, and generally evaluating whether or not the idea is actually realistic, making researching feasibility the correct response for this question The final step of the process, if other things check out, is to explore options for funding
Diff: 2 Page Ref: 112
Trang 1046) The fourth step in the initial pre-planning phase of the entrepreneurial process is .A) exploring finance options
B) researching the venture's feasibility
C) pinpointing potential competitive advantages
D) identifying potential opportunities
Answer: A
Explanation: A) After identifying both a promising opportunity in the marketplace and
competitive advantages you might have in developing this opportunity, the third step in of the process involves gauging the feasibility of the project Once all of these other steps have passed muster, the final step of the process is to see whether your ideas are fundable This may involve having discussions with banks and other sources of capital and explaining your plans and
qualifications to them
Diff: 2 Page Ref: 112
47) During the first step of the planning and organizing phase of an entrepreneurial venture, this
is accomplished
A) selecting a legal business organization form
B) stating a mission
C) selecting an organizational design
D) creating a business plan
Answer: B
Explanation: B) Once the pre-planning phase of developing an entrepreneurial venture is
complete, the planning and organizing phase of the project begins The first step of this process involves identifying a mission for the organization, making stating a mission the correct responsefor this question The second step involves creating a business plan for the organization The third step requires the entrepreneur to select an official legal form for the organization to managetax and liability issues The final step in the process involves creating an organizational design for the venture that outlines how work will be carried out
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48) During the second step of the planning and organizing phase of an entrepreneurial venture,
an entrepreneur
A) states a mission
B) selects a legal business organization form
C) creates a business plan
D) selects an organizational design
Answer: C
Explanation: C) The first step of the planning and organizing phase of the entrepreneurial process involves identifying a mission for the organization The second step involves creating a carefully thought out business plan that details how the organization will operate and who will beinvolved in its operation, making creating a business plan the correct response for this question The third step requires the entrepreneur to select an official legal form for the organization to manage tax and liability issues The final step in the process involves creating an organizational design for the venture that outlines how work will be carried out
Diff: 2 Page Ref: 112
Trang 1149) During the third step of the planning and organizing phase of an entrepreneurial venture, an entrepreneur
A) selects an organizational design
B) creates a business plan
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50) During the fourth and final step of the planning and organizing phase of an entrepreneurial venture, this is accomplished
A) selecting a legal business organization form
B) stating a mission
C) selecting an organizational design
D) creating a business plan
Answer: C
Explanation: C) The first step of the planning and organizing phase of the entrepreneurial process involves identifying a mission for the organization The second step involves creating a carefully thought out business plan that details how the organization will operate and who will beinvolved in its operation The third step requires the entrepreneur to select an official legal form for the organization to manage tax and liability issues, The final step in the process involves creating an organizational design for the venture that outlines how work will be carried out, making selecting a design the correct response for this question
Diff: 2 Page Ref: 112
51) Once an entrepreneurial venture is actually up and running, the entrepreneur switches to a role
Diff: 2 Page Ref: 112
Trang 1252) This is the simplest and most brief type of business plan.
A) synopsis-type plan
B) full business plan
C) summary business plan
D) executive summary
Answer: D
Explanation: D) An executive summary is a condensed business plan that is no more than two pages in length that briefly describes how the organization will operate, making executive summary the correct response for this question A synopsis-type plan is a step up from an
executive summary, providing an executive summary and a separate proposal that describes the attractive characteristics of the venture to investors A summary business plan includes an executive summary and a brief description of all key components of the venture A full business plan includes an executive summary and detailed analyses of all of the venture's major
components
Diff: 2 Page Ref: 112-113
53) This type of business plan is a step up from the simplest type of business plan
A) summary business plan
B) executive summary
C) synopsis-type plan
D) full business plan
Answer: C
Explanation: C) An executive summary is the simplest type of business plan that briefly
describes how the organization will operate A synopsis-type plan is a step up from an executive summary, providing an executive summary and a separate proposal that describes the attractive characteristics of the venture to investors, making a synopsis-type plan the correct response for this question A summary business plan provides more than a synopsis-type plan and includes an executive summary and a brief description of all key components of the venture A full business plan is the most complete plan and includes an executive summary and detailed analyses of all ofthe venture's major components
Diff: 2 Page Ref: 112-113
54) This type of business plan is a step down from the most complete type of business plan.A) summary business plan
B) full business plan
C) executive summary
D) synopsis-type plan
Answer: A
Explanation: A) An executive summary is the simplest type of business plan that briefly
describes how the organization will operate A synopsis-type plan is a step up from an executive summary, providing an executive summary and a separate proposal that describes the attractive characteristics of the venture to investors A summary business plan provides more than a
synopsis-type plan and includes an executive summary and a brief description of all key
components of the venture A summary plan is one step down from a full business plan, the mostcomplete plan This makes a summary business plan the correct response for this question.Diff: 2 Page Ref: 112-113
Trang 1355) This is the the most complete and comprehensive type of business plan.
A) executive summary
B) full business plan
C) summary business plan
D) synopsis-type plan
Answer: B
Explanation: B) A full business plan is the most complete and comprehensive business plan and includes an executive summary and detailed analyses of all of the venture's major components, making full business plan the correct response for this question An executive summary is the simplest type of business plan that briefly describes how the organization will operate A
synopsis-type plan is a step up from an executive summary, providing an executive summary and
a separate proposal that describes the attractive characteristics of the venture to investors A summary business plan provides more than a synopsis-type plan and includes an executive summary and a brief description of all key components of the venture
Diff: 2 Page Ref: 112-113
56) The mission statement of an entrepreneurial venture would be included in this section of a full business plan
Diff: 2 Page Ref: 113-114
57) This section of a full business plan would include possible income statements for the next three years
A) financial data and projections
analysis sizes up the market for the venture and assesses the organization's potential competitors.Diff: 2 Page Ref: 113-114
Trang 1458) Identification of the organization's key personnel would be included in this section of a full business plan.
A) analysis of the context
Diff: 2 Page Ref: 113-114
59) This section of a full business plan would include a description of the demographics of the target market for the organization
A) description of the business
B) financial data and projections
Diff: 2 Page Ref: 113-114
60) This section of a full business plan would include an assessment of the industry of the
venture and how it fits into the overall economic climate
A) analysis of context
B) description of the business
C) financial data and projections
D) analysis of opportunity
Answer: A
Explanation: A) The context analysis gives a broad description of the entire business context of the venture—how the venture is situated within its industry and how that industry fits into the larger general economy This makes analysis of context the correct response for this question The financial data and projections section provides estimates of costs, revenue, and cash for the years to come The business description details how the venture will be organized, launched, and managed The opportunity analysis sizes up the market for the venture and assesses the
organization's potential competitors
Diff: 2 Page Ref: 113-114